Top companies can shift 40 per cent steel movement to coastal shipping: Government

NEW DELHI: India's top steel companies, including SAIL, Tata Steel and JSW, can easily shift about 40 per cent of their inter-state goods movement to coastal shipping, a government report said.

Promoting coastal shipping of just six commodities, including coal, cement and steel, could result in a huge Rs 40,000 crore annual savings, according to the ambitious Sagarmala programme, which emphasises on port-led development of the country.

"Nearly every major plant has a potential to shift nearly 30-40 per cent of their inter-state rail movements to coastal shipping," said the latest report.

The shipping ministry has said Tata Steel has the potential to shift about 1 million tonne of steel from its inter-state rail movement to Kolkata Port from Jamshedpur and 0.4 mt to Paradip from Kalinganagar plant.

Likewise, SAIL plants at Durgapur, Rourkela, Bokaro and IISCO have potential to switch about 2.7 mt of steel for movement through coastal shipping from Kolkata and Paradip ports instead of rail transportation.

The report pointed out that the figure for JSW is up to 0.6 mt of steel that can be shifted for coastal shipping from its Torangallu plant to Mormugao.

The report has said that of the total, coastal shipping of thermal coal alone could result in savings of about Rs 20,000 crore while promoting steel and cement would save an annual Rs 5,500 crore and Rs 4,000 crore, respectively.

The government has already announced a port-led development of coastal areas under its ambitious Sagarmala project that aims at harness India's 7,500-km long coastline and 14,500-km of potentially navigable waterways.

To encourage shippers to shift cargo to waterways and coastal shipping, the government is planning to provide an incentive of Re 1 per km for a tonne of cargo.

"To encourage modal shift of cargo to coastal shipping and inland waterways transportation, the government is planning to offer financial incentive to shippers who switch to waterways from roads and rails for movement of cargo," an official said.

Initially, the government plans to include 9 commodities that include foodgrain, automobile, cement and marble.

The government has already expressed its commitment to promote coastal shipping and inland waterways transportation and has envisioned increasing of the share of waterways transportation mode to 10 per cent by 2020 from the current level of 7 per cent.

"Across all commodities, coastal shipping volumes could grow to 5-6 times of current levels to about 400-480 million tonnes (mt) by 2025," according to a blueprint on Sagarmala unveiled by the government.